The Indian government’s decision to introduce a statement that aims to prohibit all private cryptocurrencies in the country was not wholly unexpected. The issue of crypto first came into the spotlight when the case went to the Supreme Court four years ago. In the middle of long arguments, three judges set aside the RBI circular. It prevented crypto exchanges from dealing with the formal financial system. However, the judges acknowledged the role of the RBI in protecting the interest of economic stability.
The current statement attempts to characterize the rules so that tax authorities, the RBI, SEBI, and other agencies have better legal advice in determining the course of action. Therefore, the regulations can vary from a ban to supervised interaction with the traditional financial system.
Since the emergence of bitcoin, many assets have appeared with various degrees of financial engineering. Almost all cryptos are based on blockchain, while not all blockchain is crypto.
Experts who have observed movements and tendencies in AI predicted that the algorithmic world that will emerge in the next few years would emphasize the idea of the nation-state. This is the idea that emerged from the Treaty of Westphalia. Blockchain technology, including crypto, is essential for this virtual world. Some cryptos, such as the stable coin, apparently reveal that these are attempts to create forms of money that include price stability features. It also involves concerns about terrorist threats, money laundering, and narco-trading that come as anonymity that cryptocurrencies offer.
Once deciding to co-opt this innovation, the question will appear on how it can interact with the legal system. For now, cryptos are considered assets or commodities. Besides, they became recognized as a medium of exchange. However, their role as a legal tender imposes limitations.
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